Professional indemnity Insurance – Essential for Professionals

As a professional, you have a duty to offer 'reasonable skill and care', as part of the service you provide. If you fail to exercise this duty and are subsequently proven to be negligent, you may be liable for any losses incurred by your customers or other third party. Proving your innocence isn’t cheap so in today’s litigious climate it pays to be protected.

Professional indemnity insuranceis something that is often overlooked with devastating consequences unfortunately, no matter how good we are at our jobs or how good our attention to detail may be there is always the potential for small mistakes to be made.

Anyone who offers their knowledge, experience or skills as a paid service could benefit from professional indemnity cover. It’s now a common requirement for many professions such as solicitors, financial advisors, designers, accountants, architects, insurance brokers, builders and PR and marketing consultants.

The policy covers all sums which the insured professional becomes legally liable to pay as damages to third party in respect of any error and/or omission on his/her part committed whilst rendering professional service.

This type of cover could help protect you financially if you are faced with a negligence claim. If you make a mistake or offer flawed advice which has a negative impact on your client or customer, they may seek some compensation.

Now these days most of the insurer in the market will provide the cover against

• Neglect, error or omission including breach of contract
• Dishonest, fraudulent, criminal or malicious acts or omissions of any person employed at any

time.
• Unintentional breach of, or unauthorised use of, confidential information, trade secrets, patents

     and copyrights of the systems or programs of third parties
•    The publication or utterance of a libel or slander.
•    All costs, charges and expenses incurred in replacing or restoring any documents that have been

lost, damaged, destroyed, mislaid, distorted or erased.
• The negligence of any specialist consultants or sub-contractors acting on your behalf or for

whom you are responsible.
• Any retroactive cover for all work since the start of the policy.

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Today’s savvy consumer is highly aware of their legal rights and today’s blame culture has been found to be largely responsible for the increase in claimants against a whole manner of service providers.

In Professional Indemnity policy, many insurers include a retroactive date within their policy. This covers for work completed during that period i.e. if you have 2 years retroactive cover, you will be covered against claims connected with work you’ve carried out during the previous 2 years. This is an essential option if you have undertaken a lot of high-risk work in the past.

While professional indemnity may be compulsory insurance for some businesses, for others it gives significant peace of mind which is just as valuable.

Ultimately, by preparing for a number of legal eventualities, it is a sensible way to ensure you are looking after the long term future of your business while protecting yourself at the same time.

Don’t leave yourself vulnerable – make sure your business is protected with comprehensive professional indemnity insurance. Make sure any risks associated with being self-employed are fully protected.

It is advisable that you examine the terms of any professional indemnity policy before you make a purchase as the extent of cover can vary between insurers.